Washington D.C. Non-Compete Ban May Wait Until 2022

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All Washington D.C. employers should take note that the city’s recent law to ban non-compete agreements has not taken force and may not within the current year. Instead, it may wait until the law can be funded, likely at some point in 2022.

The Ban on Non-Compete Agreements Amendment Act of 2020 took effect on March 16th, 2021, creating possibly the most stringent ban on non-compete agreements in the country. This act banned virtually all agreements that prohibit an employee from working for competitors after employment or competing with an employer during employment.

Though the law took effect earlier this year, its terms prevent it from applying until the law becomes funded. This is unlikely to occur in the course of the current year as one of the bill’s original sponsors has requested that funding waits until April 2022 in order to consider potential issues raised by members of the community. 

This means that for the time being, Washington D.C. employers may continue to enforce non-compete agreements limiting the outside employment and business activities of employees. It is important to keep aware, however, of the possibility of an earlier funding date or a decision by the Federal Trade Commission, which has been tasked by the president to consider federal limits on non-compete agreements.